Social Security Testimony Before Congress

Statement by Dr. Shirley Chater,
Commissioner of Social Security,
before the House Committee on Government Reform and Oversight

August 3, 1995

Mr Chairman and Members of the Committee:

I am submitting this statement for the record as a supplement to my testimony
of May 23, 1995, to further address your concerns about the Social Security disability
insurance (DI) program. You stated in the press release announcing this hearing that
you are committed to fairness in the disability program, enabling those who are truly
disabled to receive benefits quickly, and stopping payments to those who have
recovered (i.e., are no longer disabled). Let me state at the outset that we absolutely
share your commitment. In addition, we are committed to seeing that Social Security
DI and Supplemental Security Income (SSI) disability beneficiaries have full access to
a positive, quality vocational rehabilitation program to assist them to enter productive
employment.

The issues associated with the disability programs we administer are very
difficult and complex and have been ongoing for many years. There are no easy fixes.
Nevertheless we agree that we can do a better job in these areas. Let me assure you
that solving any problems associated with the disability programs is a top priority. At
SSA, we are dedicated to making essential improvements in the disability programs so
that they work better for all Americans.

As I indicated in my testimony earlier this year. we have been focusing our
improvements in three specific areas that we believe will help us achieve major
improvements in the disa bility programs. First. we are redesigning the disability
claims process from start to finish. The current lengthy and complicated decisionmaking
process is broken and needs fixing. Second, we are continuing to seek
improvement in the way we conduct continuing disability reviews (CDRs) and greater
funding to finance CDRs. And third, we are developing approaches to increase the
employment opportunities of current and potential disability beneficiaries. Let me
begin with the disability redesign.

SSA's Disability Process Redesign

When I spoke before you in May, I explained that our redesign plan included
both short-and long-term initiatives. I mentioned that although our short-term
initiatives were designed to reduce the number of claims pending in the State
Disability Determination Services (DDSs) and the Office of Hearings and Appeals
(OHA), we had not fully implemented the most significant actions in OHA.
Consequently, pending hearing-level workloads in OHA had increased. On the other
hand, DDSs' pending workloads had dropped by about 45,000 claims (6 percent) as a
direct result of our short-term initiatives. Since then, DOSs have continued to reduce
the number of pend ing claims by about 53,000, for an overall decreas e of 13 percent.
This is a very significant improvement. We are well on our way to our FY 1996 goal
of 304,000 pend ing claims. down from 552,000 at the end of FY 1994.

Since May, we have focused our efforts on OHA and the most significant
actions in our short-term initiative plan are now underway. On June 30, 1995, we
published a fmal regulation which granted temporary authority to attorney advisors at
OHA to conduct pre-hearing proceedings and, where the evidence warrants, to issue
wholly favorable decisions. When this initiative is fully implemented, it will assist us
in further substantially reducing the number of requests for hearings that are pending.
In addition to ensuring more effective use of automation at OHA, we have increased
our pre-hearing screening of cases and temporarily redirected resources from other
agency components to draft disability decisions at OHA.

Despite the fact that the number of pending hearings is significantly higher now than at
the beginning of the fiscal year, we have begun to reduce the numbers of cases
pending at OHA. For the two week period ending August 3, 1995. pendings were
decreased by 4,057 cases. While these results are somewhat small, this is a very
significant step in the right direction.

With respect to our long-term initiatives, I stated that we were moving quickly
to implement those aspects of the new disability process that could be achieved in the
near-term. I specifically mentioned that we would be increasing public awareness of
the requirements for disability benefits by providing comprehensive public information,
training our disability adjudicators on critical areas, and developing an Adjudication
Officer position to conduct pre-hearing conferences. We are currently reviewing
comments on the notice of proposed rulemaking we published in the Federal Register
on June 9, 1995, to authorize testing of the Adjudication Officer position, and we
expect to publish a final regulation authorizing this testing in the near future.

Further, on June 29, 1995, I approved a series of disability process
improvements that will begin to move SSA closer to its five-year plan to fully
implement tl.e redesigned disability process. These improvements will begin this fall
and should significantly enhance the overall disability process. They include:

More uniform policy guidance and training for all disability adjudicators and
reviewers;

The adoption of quality assurance guiding principles tailored to our new
processes.

Once complete, we believe that our disability process redesign initiatives will
assure swift, efficient decisionmaking and processing on a continuing basis.

Continuine Disability Reviews

Let me now address the status of our efforts to improve the CDR process.
During my last appearance before this subcommittee, I explained that the CDR process
directly affects the number of beneficiaries who remain on the DI rolls because this
process allows us to terminate disability benefits to those who are no longer disabled.
I also explained how unprecedented increases in initial disability claims workloads
required previous Commissioners to make difficult decisions on the prudent use of
limited resources, one of which was to place less emphasis on CDRs.

However, recognizing the need to strike a better balance between addressing the
growing workloads in initial disability claims and conducting CDRs, we implemented a
more efficient CDR process in 1993. I elaborated on this new CDR process and our
expectations of increasing the number of CDRs we process.

We are continuing to evaluate and improve our CDR process, including the
development of a machine-readable CDR mailer questionnaire which will enable us to
electronically screen CDRs and store the data for analysis. In addition, we are also
responding to a General Accounting Office audit to determine:

The characteristics of beneficiaries in the pending caseloads in order to more
accurately profile these beneficiaries and predict medical improvement;

What SSA and DDS resources would be necessary to eliminate the current CDR
workload over the next few years; and

What effect this might have on our initial and appeals workloads.

We are determined that disability program dollars should be going only to those
who are truly entitled .

SSA's Vocational Rehabilitation Program

I would now like to discuss the issue of vocat ional rehabilitation (VR). At the May 23, 1995 hearing, I very briefly explained SSA's return-to-work strategy to assist
individuals with disabilities re-enter the work force. We are very concerned that,
despite the fact that numerous studies show that people with disabilities want to work.
SSA's current VR process is not as effective as it could be. Very few disabled
beneficaries have returned to work at the substantial gainful activity level and left the
beneficiary rolls as a direct result of our VR program. Because this is a complex
issue, let me now provide you with an overview of the history of the VR program,
describe our current VR process, and also tell you about some steps we are taking to
improve the VR program and increase the number of beneficiaries who leave the rolls
and return to work.

History of the VR Program

As you know, the primary public VR program was established in 1920 and is
now authorized by the Rehabilitation Act of 1973, as amended. The Rehabilitation
Services Administration, which is part of the Department of Education, administers the
program as a partnership between the Federal Government and the States-- 80 percent
of the funds come from Federal appropriations and 20 percent from State
appropriations. When Congress established the Social Security disability program in
1956, it expressed great confidence in the value of VR for people with disabilities by
including a provision that provided for the referral of disability applicants to State VR
Agencies.

Current VB Process

People who apply for disability benefits are provided information about the
availability of services from their State VR agency. When their claim goes to the
State DDS for adjudication, a DDS examiner (or a Stale VR agency counselor) screens
the cases to identify persons who may benefit from VR and then refers these
individuals to State VR agencies. (I should point out that SSA's referral process is but
one route to receiving VR services. Many disability applicants and beneficiaries, on
their own initiative or at the advice of their doctors, employers, or other interested
third-parties, seek out services from State VR agencies.)

Once the referral is made, neither SSA staff nor State DDS examiners are involved in
deciding who receives services or what services are provided. These decisions are
made in light of regulations and policies set forth by the Department of Education's
Rehabilitation Services Administration and the State VR agency's own guidelines. If
the individual is eligible for services, which could include diagnostic services,
counseling, medical services or training, the VR agency counselor and client jointly
work out a plan or program of rehabilitation. According to the Rehabilitation Services
Administration, many State VR agencies are unable to meet the current demand for
services.

Under current law, SSA pays for VR services only when these services result in a
successful outcome, i.e. when the beneficiary performs substantial gainful activity for
a continuous period of nine months and SSA determines that the VR services
contributed to the return of the individual to such activity. In FY 1994, SSA
reimbursed State VR agencies $63.4 million for successfully rehabilitating about 5,600
beneficiaries. Since 1983, when the current VR payment program began, just over
55,000 beneficiaries have been rehabilitated and employed through this program.

Steps Taken to Improve the Current VB process

We are concerned about the effectiveness of the current VR process and have taken
several steps to increase the number of beneficiaries who are served by State VR
agencies and to increase the participation of private sector rehabilitation providers in
the process. For example, SSA has been implementing the recommendations of a
Federal-State task force to improve the VR referral process; simplifying Federal
guidelines for VR referral; sponsoring greater collaboration among SSA. State DDS
and State VR agencies; and tracking persons who request referral for VR services in
the course of a CDR. SSA is also streamlining the VR payment process, which will
expedite claims, and improving its management information about the persons who
receive VR services and the services they receive.

In June 1989, SSA submitted a legislative proposal to authorize us to contract directly
with private VR providers to serve our beneficiaries. The private sector has grown
significantly in numbers in recent years, and there are many small businesses,
community-based facilities and nation al firms with the experience and specialized
knowledge to serve people with severe disabilities. In fact, State VR agencies often
contract with the private sector for services. In FY 1991, the latest data we have
available, 64 percent of beneficiaries who were accepted by State VR agencies received
some type of service from the private sector. When SSA's proposal was not enacted,
we sought to modify the process through regulations which permit us to use private or
other public agencies as alternate sources when a State VR agency declines to serve an
individual whom SSA has referred to it.

These new regulations, published March 15, 1994, brought the first substantive changes
to the SSA VR program in over a decade. In addition to expanding the pool of
potential service providers, thereby expanding opportunities for our beneficiaries to
receive rehabilitation services and return to work, the regulations protect consumers by
assuring that alternate providers are qualified through licensing or certification to serve
them.

Since the publication of these regulations, we have been working hard to put the new
process in place. Briefly:

We have modified the claims system to record when a beneficiary is referred to
a State VR agency and are developing a system to track these referrals.

We are informing public and private sector rehabilitation providers about our
VR program.

We are developing criteria for certifying altern ate providers as qualified to serve
our beneficiaries under the VR payment program.

We are working with our attorneys and Federal procurement professionals to
draft model agreements and contracts with alternate providers who agree to
serve our beneficiaries.

We expect to have the framework in place to begin enrolling alternate providers in the
next few months.

Let me briefly describe two other initiatives to expand VR services and job
opportunities for disabled beneficiaries. The first, Project Network, was initiated in
1991 to test 4 service delivery models that offer alternatives to the current VR
program.

Project Network is the SSA's first large-scale demonstration of VR assistance to
persons with severe disabilities. This project is also the first major attempt by SSA to
take direct responsibility for helping people with disabilities enter or reenter the
workforce. Project NetWork used a randomized field experiment design to test 4
models of providing employment and rehabilitation services to DI beneficiaries and
SSl applicants and recipients. All of the models were completed in March, 1995.
Preliminary results will be available in FY 1996 and a final evaluation report is due
December 1997.

We have contracted with a major social science research finn to perform a
comprehensive evalua tion of Project NetWork. The evaluation will address two key
policy questions:

Is it feasible to increase participation in VR serv ices among DI and/or SSI
beneficiaries through a combination of intensive outreach, case management,
and enhanced work incentives? and

Do the interventions tested produce net benefits from the perspective of
participants, society, the DI trust fund, general revenues, and the Federal
government in general?

The second initiative, Project ABLE-launched in 1993--is a joint Federal-State
initiative to link disabled job-ready beneficiaries with public agencies and private
sector employers that need their skills and abilities.

Project ABLE began as a pilot program in 1993 for disability beneficiaries
residing in Maryland, Virginia and the Distr ct of Columbia. Project ABLE is a joint
effort of the Office of Personnel Management (OPM) in conjunction with SSA, the
Rehabilitation Services Administration and participating State VR agencies. Through
this program, State VR agencies enroll job-ready beneficiaries into a database which is
used by Federal agenc ies to find qualified candidates.

I am pleased to report that, based on favorable input from VR counselors and
personnel offices, the Project ABLE system has been improved and is being expanded
to California, Illinois, Pennsylvania and Texas. In addition, we have enhanced the
Project ABLE database to include resume imaging that will allow prospective
employers to receive a client resume by fax directly from the Project ABLE database.
Another enhancement will automatically give Federal agencies listings of eligible
employees from Project ABLE for all posted job vacancies.

While only a very small number of beneficiaries have been hired to date, we
believe Project ABLE's success has been limited by restricted hiring and down sizing
of government agencies throughout this period. We are beginning to work with the
Department of Labor (DOL) to list Project ABLE clients in various databases funded
by DOL that are principally used by private sector employers and to work with States
that are experimenting with "one-stop shopping" employment centers.

Project ABLE has been recognized as a National Performance Review
"Reinvention Lab" and I am pleased that Project ABLE has proven to be a fine
example of Federal and State agencies collaborating to give state-of-the-an service to
their respective customers.

Employment Strategy for People with Disabilities

In addition to the initiatives I just mentioned, as I indicated at the May hearing,
we are examining other approaches to increase the employment of current and potential
disabled beneficiaries. I have established a team headed by Dr. Susan Daniels,
Associate Commissioner for Disability, to examine approaches to increase the
employment of disability beneficiaries. I am very interested in approaches for bringing
together the interests of employers, private insurers, and rehabilitation services to
achieve more efficient handling of claims and to return to the workplace as many
people as are able to work. Over the coming months, we will continue to work with
our State partncrs, other public agencies, and private organizations that serve people
with disabilities in an effort to improve these services and to create greater
employment opportunities for our beneficiaries as we move forward.

Conclusion

In summary, Mr. Chairman, I thank you for the opportunity to submit my
statement for the record. Even though it has only been two months since I last
testified before you and your subcommittee, we have made measurable progress and
we can assure you that our progress will continue. We are working to maintain
fairness in the disability program, improve the integrity of our disability rolls, and
increase employment opportunities for current and potential disability beneficiaries.
The initiatives I have described will help us accomplish these goals.

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